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We still have two more relatively busy weeks of the elongated fourth quarter earnings season, but through this morning, 79% of the S&P 500 has reported quarterly results.

According to FactSet, fourth quarter earnings per share are now expected to grow 13% with sales up 7%. Earnings were expected to grow 10.6% year-over-year with revenue up 5.6% just over one month ago heading into the reporting season. Growth of 13% comes on top of 15% growth last year, making this the fifth consecutive quarter of double-digit earnings growth.

Just over 67% of the S&P 500 has beat earnings estimates while 23% have missed. Hope has sprung eternal so far this year as the market has appreciated while 60% of companies have traded higher in response to earnings. Third quarter earnings season saw 77% beat earnings estimates but only 50% trade higher in response as the market corrected.

FactSet notes that fourth earnings growth is coming in at twice the rate (16% vs. 8%) for companies who see more than 50% of sales within the United States. The stronger dollar, slower economic growth in China, Europe and emerging markets and trade tensions are all weighing on earnings growth for companies with more international exposure.

That brings us to the first quarter of 2019, where earnings expectations for the first quarter have come down dramatically. First quarter EPS is now expected to fall 2.5% with sales up 5.5%. Keep in mind the year-over-year tax cut benefit goes away starting in the first quarter. Earnings were expected to grow 2% with sales up 6% one month ago.

First quarter earnings are expected to fall 15% in the Energy sector, 10% in the Information Technology sector (down 8% excluding the 13% decline expected from Apple), 9% in the Materials sector, in the low single digits for the Consumer Discretionary, Communications Services and Consumer Staples sectors and 1% for the Financial sector. Earnings are expected to grow 6% in the Health Care sector, 4% in the Utilities sector and 3% in the Industrial sector.

While an earnings decline is clearly not welcome, earnings tend to come in modestly higher than estimates, so it's still possible that first quarter earnings come in flat or slightly positive.

We are currently expected to avoid an earnings recession. Earnings are forecasted to grow in the low-single digit range in the second and third quarters. However, analyst estimates tend to be optimistic on the out quarter and years. Companies will likely start to paring expectations for the second quarter during first quarter earnings season, which kicks off in the second half of April.

For 2019, earnings are expected to grow 4.9% with sales up 4.8%. That's respectable considering earnings growth is set to come in at 20%, boosted by the lower tax rate, with sales up 9% in 2018.

According to S&P Capital IQ, the S&P 500 currently trades at 16.6x forward earnings estimates, which is roughly in-line with the average over the last five years of this bull market.

We still have two more relatively busy weeks of the elongated fourth quarter earnings season, but through this morning, 79% of the S&P 500 has